SEC Set to Announce Market Timing Action against
BoA

February 8, 2005 (PLANSPONSOR.com) - The Securities
and Exchange Commission (SEC) is expected in the next week to
charge two former FleetBoston Financial employees, settle
with three others, and announce a final agreement with the
bank's new owner, Bank of America.

The regulator is expected to charge former executive
James Tambone and former sales official Robert Hussey with
fraud related to undisclosed agreements that allowed
certain investors to market-time the former bank’s Columbia
funds unit, according to the Boston Globe. Three other
Columbia employees – Joseph Palombo, Erik Gustafson, and
Peter Martin – are all expected to settle for cash fines
and suspensions.

FleetBoston was bought out by Bank of America in March,
and at that time the new entity struck a preliminary deal
with the SEC worth $675 million (See
BofA, Fleet Near Settlement With SEC,
Spitzer
). This figure is not expected to be changed when the SEC
announces that a final deal has been reached, according to
the Globe. The $675 million is comprised of $195 million in
penalties, $320 in retuned profits, and a $160 million tag
in fee reductions as part of a separate agreement with New
York Attorney General Eliot Spitzer.

The settlement would be the largest one in dollar terms
since regulators started to crack down on mutual fund late
trading and market timing in September 2003, according to
the Globe. In total, over $3 billion in fines have been
collected over the affair that rocked the mutual fund
world.